Wouldn’t it Make More Sense to Mine Our Own Minerals?

The: United States teamed up with the European Union and Japan: in a complaint to the World Trade Organization against China over its rare earth export (REE) policies. While it would be nice if China would stop hoarding their minerals, wouldn’t it make more sense to start doing more mining of our own resources? At: The Enterprise Blog,: Michael Mazza and Lara Crouch pointed out something that’s worthy of attention. [Emphasis added]

The truth is, the market is adjusting on its own to correct the distortions resulting from China’s export quotas. Derek Scissors makes this: argument: convincingly: “China’s extreme dominance can only last as long as it is willing to offer REEs at below-market prices … As soon as Beijing stopped undercutting market prices, price rose and the hunt for alternatives began–which has started to bring prices down.” In other words, global market forces reacted to high prices throughout 2010 and much of 2011, and prices have dropped precipitously in the latter half of 2011. Additionally, as Scissors points out,: China may control 90 percent of current supply, but it only has 50 percent of current REEs reserves, which means there is plenty of opportunity for other producers, miners, and manufacturers along every point of the complex REEs supply chain to enter the market. This will allow all nations : to decrease their dependence on China for REEs.

Shouldn’t that be the goal here? Why would we want to remain dependent on China?